Dynamic Random Access Memory Semiconductors from the Republic of Korea: Preliminary Results of Countervailing Duty Administrative Review, 38579-38584 [E9-18597]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 74, Number 148 (Tuesday, August 4, 2009)]
[Notices]
[Pages 38579-38584]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18597]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-580-851]


Dynamic Random Access Memory Semiconductors from the Republic of 
Korea: Preliminary Results of Countervailing Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative 
review of the countervailing duty order on dynamic random access memory 
semiconductors from the Republic of Korea for the period January 1, 
2007, through December 31, 2007. We preliminarily find that Hynix 
Semiconductor, Inc. received countervailable subsidies during the 
period of review, which result in a de minimis subsidy rate. If these 
preliminary results are adopted in our final results of this review, we 
will instruct U.S. Customs and Border Protection not to assess 
countervailing duties as detailed in the ``Preliminary Results of 
Review'' section of this notice. Interested parties are invited to 
comment on these preliminary results. See the ``Public Comment'' 
section of this notice.

EFFECTIVE DATE: August 4, 2009.

FOR FURTHER INFORMATION CONTACT: David Neubacher or Shane Subler, 
Office of AD/CVD Operations, Office 1, Import Administration, 
International Trade Administration, U.S. Department of Commerce, Room 
3069, 14th Street and Constitution Avenue, NW, Washington, DC 20230; 
telephone: (202) 482-5823 and (202) 482-0189, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 11, 2003, the Department of Commerce (``the Department'') 
published a countervailing duty order on dynamic random access memory 
semiconductors (``DRAMS'') from the Republic of Korea (``ROK''). See 
Notice of Countervailing Duty Order: Dynamic Random Access Memory 
Semiconductors from the Republic of Korea, 68 FR 47546 (August 11, 
2003) (``CVD Order''). On August 1, 2008, the Department published a 
notice of ``Opportunity to Request Administrative Review'' for this 
countervailing duty order. See Antidumping or Countervailing Duty 
Order, Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 73 FR 44966 (August 1, 2008). On August 28, 
2008, we received a request for review from Hynix Semiconductor, Inc. 
(``Hynix''). On September 2, 2008, we received a request for review of 
Hynix and its affiliates from the petitioner, Micron Technology, Inc. 
(``Micron''). In accordance with 19 CFR 351.221(c)(1)(i), we published 
a notice of initiation of the review on September 30, 2008. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Requests for Revocation in Part, 73 FR 56795 (September 30, 
2008).
    On December 12, 2008, we issued countervailing duty questionnaires 
to the Government of the Republic of Korea (``GOK'') and Hynix. We 
received responses to these questionnaires on January 29, 2009. On 
March 17, 2009, we issued supplemental questionnaires to the GOK and 
Hynix. We received timely responses to these supplemental 
questionnaires on April 14, 2009. We issued additional supplemental 
questionnaires to the GOK and Hynix on July 10, 2009 and received 
responses on July 23, 2009 and July 17, 2009, respectively.
    We received new subsidy allegations from Micron on February 17, 
2009.\1\ On July 7, 2009, we decided not to initiate an investigation 
of any of the new subsidies that Micron alleged in this administrative 
review. In addition, we stated the timing of the benefit of a 
previously countervailed debt-to-equity swap (``DES'') is not a new 
subsidy, but rather a valuation issue, and we would not reexamine the 
issue absent new information that would cast substantial doubt on our 
finding. See Memorandum to Susan Kuhbach, Director, Office 1, entitled 
``Fifth Countervailing Duty Administrative Review: Dynamic Random 
Access Memory Semiconductors from Korea: New Subsidy Allegations 
Memorandum'' (July 9, 2009) (``NSA Memo''), available in the Central 
Records Unit, Room 1117 of the main Department building.
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    \1\ See submission from Micron to the Department, Re: Dynamic 
Random Access Memory Semiconductors From Korea: New Subsidy 
Allegation (February 17, 2009) (``New Subsidy Allegations'').
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    On April 14, 2009, we published a postponement of the preliminary 
results in this review until August 3, 2009. See

[[Page 38580]]

Dynamic Random Access Memory Semiconductors from the Republic of Korea: 
Extension of Time Limit for Preliminary Results of Countervailing Duty 
Administrative Review, 74 FR 17166 (April 14, 2009).

Scope of the Order

    The products covered by the order are DRAMS from the ROK, whether 
assembled or unassembled. Assembled DRAMS include all package types. 
Unassembled DRAMS include processed wafers, uncut die, and cut die. 
Processed wafers fabricated in the ROK, but assembled into finished 
semiconductors outside the ROK are also included in the scope. 
Processed wafers fabricated outside the ROK and assembled into finished 
semiconductors in the ROK are not included in the scope.
    The scope of the order additionally includes memory modules 
containing DRAMS from the ROK. A memory module is a collection of 
DRAMS, the sole function of which is memory. Memory modules include 
single in-line processing modules, single in-line memory modules, dual 
in-line memory modules, small outline dual in-line memory modules, 
Rambus in-line memory modules, and memory cards or other collections of 
DRAMS, whether unmounted or mounted on a circuit board. Modules that 
contain other parts that are needed to support the function of memory 
are covered. Only those modules that contain additional items which 
alter the function of the module to something other than memory, such 
as video graphics adapter boards and cards, are not included in the 
scope. The order also covers future DRAMS module types.
    The scope of the order additionally includes, but is not limited 
to, video random access memory and synchronous graphics random access 
memory, as well as various types of DRAMS, including fast page-mode, 
extended data-out, burst extended data-out, synchronous dynamic RAM, 
Rambus DRAM, and Double Data Rate DRAM. The scope also includes any 
future density, packaging, or assembling of DRAMS. Also included in the 
scope of the order are removable memory modules placed on motherboards, 
with or without a central processing unit, unless the importer of the 
motherboards certifies with U.S. Customs and Border Protection 
(``CBP'') that neither it, nor a party related to it or under contract 
to it, will remove the modules from the motherboards after importation. 
The scope of the order does not include DRAMS or memory modules that 
are re-imported for repair or replacement.
    The DRAMS subject to the order are currently classifiable under 
subheadings 8542.21.8005, 8542.21.8020 through 8542.21.8030, and 
8542.32.0001 through 8542.32.0023 of the Harmonized Tariff Schedule of 
the United States (``HTSUS''). The memory modules containing DRAMS from 
the ROK, described above, are currently classifiable under subheadings 
8473.30.1040, 8473.30.1080, 8473.30.1140, and 8473.30.1180 of the 
HTSUS. Removable memory modules placed on motherboards are classifiable 
under subheadings 8443.99.2500, 8443.99.2550, 8471.50.0085, 
8471.50.0150, 8517.30.5000, 8517.50.1000, 8517.50.5000, 8517.50.9000, 
8517.61.0000, 8517.62.0010, 8517.62.0050, 8517.69.0000, 8517.70.0000, 
8517.90.3400, 8517.90.3600, 8517.90.3800, 8517.90.4400, 8542.21.8005, 
8542.21.8020, 8542.21.8021, 8542.21.8022, 8542.21.8023, 8542.21.8024, 
8542.21.8025, 8542.21.8026, 8542.21.8027, 8542.21.8028, 8542.21.8029, 
8542.21.8030, 8542.31.0000, 8542.33.0000, 8542.39.0000, 8543.89.9300, 
and 8543.89.9600 of the HTSUS. However, the product description, and 
not the HTSUS classification, is dispositive of whether merchandise 
imported into the United States falls within the scope.

Scope Rulings

    On December 29, 2004, the Department received a request from Cisco 
Systems, Inc. (``Cisco''), to determine whether removable memory 
modules placed on motherboards that are imported for repair or 
refurbishment are within the scope of the order. See CVD Order. The 
Department initiated a scope inquiry pursuant to 19 CFR 351.225(e) on 
February 4, 2005. On January 12, 2006, the Department issued a final 
scope ruling, finding that removable memory modules placed on 
motherboards that are imported for repair or refurbishment are not 
within the scope of the CVD Order provided that the importer certifies 
that it will destroy any memory modules that are removed for repair or 
refurbishment. See Memorandum from Stephen J. Claeys to David M. 
Spooner, regarding Final Scope Ruling, Countervailing Duty Order on 
DRAMs from the Republic of Korea (January 12, 2006).

Period of Review

    The period for which we are measuring subsidies, i.e., the period 
of review (``POR''), is January 1, 2007, through December 31, 2007.

Changes in Ownership

    Effective June 30, 2003, the Department adopted a new methodology 
for analyzing privatizations in the countervailing duty context. See 
Notice of Final Modification of Agency Practice Under Section 123 of 
the Uruguay Round Agreements Act, 68 FR 37125 (June 23, 2003). The 
Department's new methodology is based on a rebuttable ``baseline'' 
presumption that non-recurring, allocable subsidies continue to benefit 
the subsidy recipient throughout the allocation period (which normally 
corresponds to the average useful life (``AUL'') of the recipient's 
assets). However, an interested party may rebut this baseline 
presumption by demonstrating that, during the allocation period, a 
change in ownership occurred in which the former owner sold all or 
substantially all of a company or its assets, retaining no control of 
the company or its assets, and that the sale was an arm's-length 
transaction for fair market value. Hynix did not challenge this 
baseline presumption. See Hynix's January 29, 2009, questionnaire 
response at 12.

Subsidies Valuation Information

Allocation Period

    Pursuant to 19 CFR 351.524(b), non-recurring subsidies are 
allocated over a period corresponding to the AUL of the renewable 
physical assets used to produce the subject merchandise. Section 
351.524(d)(2) of the Department's regulations creates a rebuttable 
presumption that the AUL will be taken from the U.S. Internal Revenue 
Service's 1977 Class Life Asset Depreciation Range System (the ``IRS 
Tables''). For DRAMS, the IRS Tables prescribe an AUL of five years. 
During this review, none of the interested parties disputed this
    allocation period. Therefore, we continue to allocate non-recurring 
benefits over the five-year AUL.

Discount Rates and Benchmarks for Loans

    For loans that we found countervailable in the investigation or in 
the prior administrative reviews, and which continued to be outstanding 
during the POR, we have used the benchmarks from the prior 
administrative reviews.

Long-term Rates

Countervailable Loans from Prior Reviews
    For long-term, won-denominated loans originating in 1986 through 
1995, we used the average interest rate for three-year corporate bonds 
as reported

[[Page 38581]]

by the Bank of Korea (``BOK'') or the International Monetary Fund 
(``IMF''). For long-term won-denominated loans originating in 1996 
through 1999, we used annual weighted averages of the rates on Hynix's 
corporate bonds, which were not specifically related to any 
countervailable financing. We did not use the rates on
    Hynix's corporate bonds for 2000-2003 for any calculations because 
Hynix either did not obtain bonds or obtained bonds through 
countervailable debt restructurings during those years.
    For U.S. dollar-denominated loans, we relied on the lending rates 
as reported in the IMF's International Financial Statistics Yearbook.
    For the years in which we previously determined Hynix to be 
uncreditworthy (2000 through 2003), we used the formula described in 19 
CFR 351.505(a)(3)(iii) to determine the benchmark interest rate. For 
the probability of default by an uncreditworthy company, we used the 
average cumulative default rates reported for the Caa- to C- rated 
category of companies as published in Moody's Investors Service, 
``Historical Default Rates of Corporate Bond Issuers, 1920-1997'' 
(February 1998). For the probability of default by a creditworthy 
company, we used the cumulative default rates for investment grade 
bonds as published in Moody's Investors Service: ``Statistical Tables 
of Default Rates and Recovery Rates'' (February 1998). For the 
commercial interest rates charged to creditworthy borrowers, we used 
the rates for won-denominated corporate bonds as reported by the BOK 
and the U.S. dollar lending rates published by the IMF for each year.
Countervailable Loans during the current POR
    For countervailable long-term foreign-currency denominated loans 
reported by Hynix, we used, where available, the company-specific, 
weighted-average interest rates on the company's comparable commercial 
foreign currency loans from foreign bank branches in the ROK, foreign 
securities, and direct foreign loans outstanding during the POR. For 
countervailable variable-rate loans outstanding during the POR, 
pursuant to 19 CFR 351.505(a)(5)(i), we used the interest rates of 
variable-rate lending instruments issued during the year in which the 
government loans were issued. Where such loans were unavailable, the 
Department, consistent with 19 CFR 351.505(a)(3)(ii), followed its 
prior practice and relied upon lending rates as reported in the IMF's 
International Financial Statistics Yearbook. See Final Affirmative 
Countervailing Duty Determination: Dynamic Random Access Memory 
Semiconductors from the Republic of Korea, 68 FR 37122 (June 23, 2003) 
and accompanying Issues and Decision Memorandum at 5 7.

Analysis of Programs

I. Programs Previously Determined to Confer Subsidies
    We examined the following programs determined to confer subsidies 
in the investigation
    and prior administrative reviews and preliminarily find that Hynix 
continued to receive benefits under these programs during the POR.
A. GOK Entrustment or Direction Prior to 2004
    In the investigation, the Department determined that the GOK 
entrusted or directed creditor banks to participate in financial 
restructuring programs, and to provide credit and other funds to Hynix, 
in order to assist Hynix through its financial difficulties. The 
financial assistance provided to Hynix by its creditors took various 
forms, including new loans, convertible and other bonds, extensions of 
maturities and interest rate reductions on existing debt (which we 
treated as new loans), Documents Against Acceptance (``D/A'') 
financing, usance financing, overdraft lines of credit, debt 
forgiveness, and DES. The Department determined that these were 
financial contributions that constituted countervailable subsidies 
during the period of investigation.
    In prior administrative reviews, the Department also found that the 
GOK continued to entrust or direct Hynix's creditors to provide 
financial assistance to Hynix throughout 2002 and 2003. The financial 
assistance provided to Hynix during this period included the December 
2002 DES and the extensions of maturities and/or interest rate 
deductions on existing debt.
    In an administrative review, we do not revisit past findings unless 
new factual information or evidence of changed circumstances has been 
placed on the record of the proceeding that would compel us to 
reconsider those findings. See, e.g., Certain Pasta from Italy: 
Preliminary Results and Partial Rescission of the Seventh 
Countervailing Duty Administrative Review, 69 FR 45676, 45680 (July 30, 
2004), unchanged in Certain Pasta from Italy: Final Results of the 
Seventh Countervailing Duty Administrative Review, 69 FR 70657 
(December 7, 2004). No such new factual information or evidence of 
changed circumstances has been placed on the record in this review. 
Thus, we preliminarily find that a re-examination of the Department's 
findings in the investigation and prior administrative reviews with 
respect to the debt forgiveness, loans, and extensions of maturities 
and/or interest rate deductions on existing debt is unwarranted.
    Micron argues in its New Subsidy Allegations submission that the 
Department should reconsider its decision on the timing of the 2002 DES 
and find that the DES occurred in 2003. As noted above, we stated that 
the issue was not a new subsidy allegation, but rather a subsidy 
valuation issue, and we would not consider reexamining the issue absent 
new information that casts substantial doubt on this finding. See NSA 
Memo at 7.
    In its argument, Micron provides new information\2\ with regard to 
one aspect of its claims, namely that the contingency requiring 
shareholder approval of a 21:1 capital reduction was not pro forma. 
Micron's ``new information'' is the list of Hynix board members at the 
time of the Micron deal in April 2002, who had unanimously rejected the 
deal, and the list of Hynix board members at the time of the Creditors' 
Council's restructuring plan in January 2003. See Micron's February 17, 
2009, submission at 22. According to Micron, the lists show that three 
members of Hynix's board of directors (``BOD''), remained on the board 
following its vote on the Micron deal. Thus, Micron asserts, because 
the BOD still included members who had previously rejected the Micron 
deal, the BOD could still exercise independent judgment and would not 
merely ``rubber stamp'' any deal proposed by the Creditors' Council. As 
such, Micron concludes, the approval of the DES was not pro forma.
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    \2\ The list of Hynix board members at the time of the Micron 
vote, cited by Micron in its February 17, 2009, submission, was on 
the record of the second administrative review. However, Micron 
argues this same information was not on the record of the third 
administrative review when the Department last reconsidered this 
issue.
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    In DRAMS 1st AR, the Department determined that as the Creditors' 
Council controlled Hynix and its December 2002 approval was the 
singular factor in effectuating the restructuring. See Dynamic Random 
Access Memory Semiconductors from the Republic of Korea: Final Results 
of Countervailing Duty Administrative Review, 71 FR 14174 (March 21, 
2006), and accompanying Issues and Decision Memorandum at Comment 13 
(``DRAMS 1st AR''). This decision was upheld by the Court of 
International Trade (``CIT'').

[[Page 38582]]

See Micron Technology, Inc. v. United States, 535 F. Supp. 2d 1336, 
1344 (CIT 2007). In DRAMS 3rd AR, we reexamined the timing of the 2002 
DES based on new information submitted by Micron and concluded,
    As stated in the AR1 Decision Memorandum and the Preliminary 
Results, the Creditors' Council owned a majority of shares of the 
company and effectively controlled the company. {See Dynamic Random 
Access Memory Semiconductors from the Republic of Korea: Final Results 
of Countervailing Duty Administrative Review, 71 FR 14174 (March 21, 
2006), and accompanying Issues and Decision Memorandum at 77 (``AR1 
Decision Memorandum'') and Dynamic Random Access Memory Semiconductors 
from the Republic of Korea: Preliminary Results of Countervailing Duty 
Administrative Review 72 FR 51611 (September 10, 2007) (``Preliminary 
Results'').{time}  This situation effectively made its December 2002 
approval the singular factor in effectuating the restructuring and the 
new information does not call into question the Creditors' Council's 
dominant role in the process nor raise questions as to whether the 
minority shareholders' opposition was significant enough to have an 
impact on or to alter the eventual terms and passage of the agreement.
See Dynamic Random Access Memory Semiconductors from the Republic of 
Korea: Final Results of Countervailing Duty Administrative Review, 73 
FR 14218 (March 17, 2008) (``DRAMS 3rd AR'') and accompanying Issues 
and Decision Memorandum at Comment 1. Thus, in our original and 
subsequent determinations on the timing of the 2002 DES, one of the 
underlying bases for our decisions was the Creditors' Council's 
majority stake in Hynix and its effective control over the company.
    In submitting the ``new information,'' Micron does not contest this 
premise, but highlights the fact that three members of the BOD remained 
after its unanimous rejection of the Micron deal in April 2002 and, 
Micron argues, therefore, that the BOD vote on the restructuring in 
January 2003 was not pro forma. However, based upon the information 
submitted by Micron, the simple fact that three members remained on the 
BOD from the time of the Micron vote to the restructuring vote does not 
cast substantial doubt on our finding that the Creditors' Council's 
majority ownership and control of Hynix meant that the Creditors' 
Council's approval of the restructuring in 2002 was the single 
effectuating event for the DES. Therefore, absent any other new 
information that might compel us to reconsider our prior determination, 
we will not reexamine it in the context of this administrative review. 
See PPG Industries v. United States, 978 F.2d 1232, 1242 (Fed. Cir 
1992). See also, Certain Pasta from Italy: Preliminary Results and 
Partial Rescission of the Seventh Countervailing Duty Administrative 
Review, 69 FR at 45680, unchanged in Certain Pasta from Italy: Final 
Results of Seventh Countervailing Administrative Review, 69 FR 70657.
    As the benefit from the 2002 DES was fully allocated in the prior 
administrative review and we are not reexamining our prior decision, we 
are only including in our benefit calculation the following financial 
contributions countervailed in the investigation and prior 
administrative reviews: bonds, debt forgiveness, and long-term debt 
outstanding during the POR. In calculating the benefit, we have 
followed the same methodology used in prior administrative reviews.
    For loans, we have followed the methodology described at 19 CFR 
351.505(c) using the benchmarks described in the ``Discount Rates and 
Benchmarks for Loans'' section above.
    We divided the total benefits allocated to the POR from the various 
financial contributions by Hynix's POR sales. On this basis, we 
preliminarily determine the countervailable subsidy from this program 
to be less than 0.005 percent ad valorem during the POR. Therefore, 
consistent with our past practice, we did not include this program in 
our preliminary net countervailing duty rate. See, e.g., Coated Free 
Sheet Paper from the People's Republic of China: Final Affirmative 
Countervailing Duty Determination, 72 FR 60645 (October 25, 2007), and 
accompanying Issues and Decision Memorandum at 16 (``CFS''); and Final 
Results of Countervailing Duty Administrative Review: Low Enriched 
Uranium from France, 70 FR 39998 (July 12, 2005), and accompanying 
Issues and Decision Memorandum at ``Purchases at Prices that Constitute 
More than Adequate Remuneration,''' (``Uranium from France'') (citing 
Notice of Final Results of Countervailing Duty Administrative Review 
and Rescission of Certain Company-Specific Reviews: Certain Softwood 
Lumber Products From Canada, 69 FR 75917 (December 20, 2004), and 
accompanying Issues and Decision Memorandum at ``Other Programs 
Determined to Confer Subsidies'')
B. Operation G-7/HAN Program
    Implemented under the Framework on Science and Technology Act, the 
Operation G-7/HAN Program (``G-7/HAN Program'') operated from 1992 
through 2001. The purpose of this program was to raise the GOK's 
technology standards to the level of the G-7 countries. The Department 
found that the G7/HAN Program ended in 2001. See Final Affirmative 
Countervailing Duty Determination: Dynamic Random Access Memory 
Semiconductors from the Republic of Korea, 68 FR 37122 (June 23, 2003), 
and accompanying Issues and Decision Memorandum at 25. However, during 
the POR, Hynix had outstanding loans that it had previously received 
under this program. See Hynix's January 29, 2009, questionnaire 
response at 14 and Exhibit 10.
    We found that the G-7/HAN Program provided countervailable 
subsidies in the investigation. No interested party provided new 
evidence that would lead us to reconsider our earlier finding. 
Therefore, we continue to find that these loans confer a 
countervailable subsidy.
    To calculate the benefit of these loans during the POR, we compared 
the interest actually paid on the loans during the POR to what Hynix 
would have paid under the benchmark described in the ``Subsidy 
Valuation Information'' section of this notice. Next, we divided the 
total benefit by Hynix's total sales of subject merchandise for the POR 
to calculate the countervailable subsidy. On this basis, we 
preliminarily determine the countervailable subsidy to be 0.01 percent 
ad valorem during the POR.
C. 21st Century Frontier R&D Program
    The 21st Century Frontier R&D Program (``21st Century Program'') 
was established in 1999 with a structure and governing regulatory 
framework similar to those of the G-7/HAN Program, and for a similar 
purpose, i.e., to promote greater competitiveness in science and 
technology. The 21st Century Program provides long-term interest-free 
loans in the form of matching funds. Repayment of program funds is made 
in the form of ``technology usance fees'' upon completion of the 
project, pursuant to a schedule established under a technology 
execution or implementation contract.
    Hynix reported that it had loans from the 21st Century Program 
outstanding during the POR. See Hynix's January 29, 2009, questionnaire 
response at 15 and Exhibit 10.
    In the investigation, we determined that this program conferred a

[[Page 38583]]

countervailable benefit on Hynix. No interested party provided new 
evidence that would lead us to reconsider our earlier finding. 
Therefore, we continue to find that these loans confer a 
countervailable subsidy.
    To calculate the benefit of these loans during the POR, we compared 
the interest actually paid on the loans during the POR to what Hynix 
would have paid under the benchmark described in the ``Discount Rates 
and Benchmarks for Loans'' section above. We then divided the total 
benefit by Hynix's total sales in the POR to calculate the 
countervailable subsidy rate. On this basis, we preliminarily find 
countervailable benefits of less than 0.005 percent ad valorem during 
the POR. Therefore, consistent with our past practice, we did not 
include this program in our preliminary net countervailing duty rate. 
See CFS and Uranium from France.
D. Import Duty Reduction Program for Certain Factory Automation Items
    Article 95(1).4 of the Korean Customs Act provides for import duty 
reductions on imports of ``machines, instruments and facilities 
(including the constituent machines and tools) and key parts designated 
by the Ordinance of the Ministry of Finance and Economy for a factory 
automatization applying machines, electronics or data processing 
techniques.''
    Hynix reported that it had received duty reductions under this 
program during the POR. See Hynix's January 29, 2009, questionnaire 
response at 16 and Exhibit 13.
    In a prior administrative review, the Department found that the 
above program provided a financial contribution in the form of revenue 
forgone and a benefit in the amount of the duty savings. See DRAMS 3rd 
AR Final and the accompanying Issues and Decision Memorandum at 6 - 7 
and Comment 6. The Department also found the program to be de facto 
specific under section 771(5A)(D)(iii)(III) of the Act. Id. No 
interested party provided new evidence that would lead us to reconsider 
our earlier finding. Therefore, we continue to find that these duty 
reductions confer a countervailable subsidy.
    To calculate the benefit, we divided the total duty savings Hynix 
received during the POR by Hynix's total sales during the POR. On this 
basis, we preliminarily determine the countervailable subsidy to be 
0.01 ad valorem percent during the POR.
II. Program Preliminarily Determined To Confer Subsidies
    A. Import-Export Bank of Korea Import Financing
    In the fourth administrative review the Department did not make a 
finding on the countervailability of this program and said it would 
examine this program in a subsequent administrative review. See Dynamic 
Random Access Memory Semiconductors from the Republic of Korea: Final 
Results of Countervailing Duty Administrative Review, 74 FR 7395 
(February 17, 2009) and accompanying Issues and Decision Memorandum at 
7.
    As outlined in Article 18, paragraph 1, subparagraph 4 of the 
Import-Export Bank of Korea (``KEXIM'') Act, the ``Import Financing 
Program'' is provided to Korean importers to facilitate their purchase 
of essential materials, major resources, and operating equipment, the 
stable and timely supply of which is essential to the stability of the 
general economy. The equipment and materials eligible to be imported 
under the program fall under 13 headings listed in Article 14 of the 
KEXIM Business Manual. The listed items range from raw materials to 
factory automation equipment and include products and materials 
described in government notices.
    Further, according to the GOK, any Korean company is eligible for 
the ``Import Financing Program'' as long as the equipment or material 
appears under the 13 headings of eligible items, the company can 
satisfy the financial criteria laid out in ``KEXIM's Credit Extension 
Regulation,'' and KEXIM's Credit Extension Committee approves the 
financing application. Regarding the last item, the GOK stated that all 
decisions to offer this financing are based on the application and 
financial status of the applicant company.
    Hynix received loans from KEXIM under this program in 2006 and 
2007. See Hynix's April 14, 2009, supplemental questionnaire response 
at 3. See also, GOK's April 14, 2009, supplemental questionnaire 
response at 1.
    We preliminarily determine that loans under this program constitute 
financial contributions, pursuant to sections 771(5)(B)(i) and 
771(5)(D)(i) of the Act, and also provide benefits equal to the 
difference between what Hynix paid on its loans and the amount it would 
have paid on comparable commercials loans within the meaning of section 
771(5)(E)(ii) of the Act.
    Regarding specificity, information submitted by the GOK shows that 
loans provided under the program are available to any enterprise that 
meets the criteria as described above. See, e.g., GOK's January 29, 
2009, questionnaire response at 12-14 and GOK's April 14, 2009, 
supplemental questionnaire response at Exhibit 5. Further, the GOK 
reported that eligibility is not limited by law to any enterprise or 
group of enterprises, or to any industry or group of industries. Id. 
Therefore, we preliminarily determine that there is no basis to find 
this program de jure specific under section 771(5A)(D)(i) of the Act.
    In determining whether this program is de facto specific, we 
examine the four de facto specificity factors under section 
771(5A)(D)(iii) of the Act. The GOK provided program usage data for 
2003 through 2007 showing the number of industries that received loans 
under this program as well as the number of recipients and the total 
amount financed for the same period grouped by industry, region, and 
eligible item. See GOK's April 14, 2009, supplemental questionnaire 
response at 8-12 and 14-16, and GOK's July 23, 2009, supplemental 
questionnaire response at 2-7. We preliminarily determine that the 
number of enterprises receiving this subsidy is limited within the 
meaning of section 771(5A)(D)(iii)(I) of the Act because only 482 
companies received this award from 2003 through 2007. See GOK's April 
14, 2009, supplemental questionnaire response at 12. Thus, we find the 
program to be de facto specific within the meaning of section 
771(5A)(D)(iii)(I) of the Act. Therefore, we preliminarily find loans 
provided by KEXIM under this program provide countervailable benefits 
to Hynix.
    To calculate the benefit under this program, we used the benchmarks 
described in the ``Discount Rates and Benchmarks for 
Loanssection above, as well as the methodology described in 
19 CFR 351.505(c). On this basis, we preliminarily determine that Hynix 
received a countervailable subsidy of 0.04 percent ad valorem under 
this program.
III. Program Preliminarily Found to Have Provided No Benefits
    A. Short-Term Export Financing
    KEXIM provides short-term export financing to small-, medium- and 
large-sized companies (not including companies included in the largest 
five conglomerates in the ROK, unless the company's headquarters is 
located outside the Seoul Metropolitan area). The loans are not tied to 
particular export transactions. However, a company, along with the 
financing application, must provide its export performance periodically 
for review by KEXIM. Further, any loan agreement

[[Page 38584]]

may only cover an amount ranging from 50 to 90 percent of the company's 
export performance up to 30 billion won.
    Hynix received a loan under this program during the POR and 
provided documentation (e.g. loan application, approval document, and 
loan agreement), as well as data regarding the loan amount and interest 
paid during the POR. See Hynix's April 14, 2009, supplemental 
questionnaire response at 3 and 5. Upon examination of the 
documentation as well as the loan amount and interest paid during the 
POR, the Department preliminarily determines that there was no 
measurable benefit. Accordingly, it is unnecessary in this review for 
the Department to make a finding as to the countervailability of this 
program for this POR. We will include an examination of this program in 
a future administrative review.
IV. Programs Previously Found Not to Have Been Used or Provided No 
Benefits
    We preliminarily determine that the following programs were not 
used during the POR:
    A. Reserve for Research and Human Resources Development (formerly 
Technological Development Reserve) (Article 9 of RSTA / formerly, 
Article 8 of TERCL)
    B. Tax Credit for Investment in Facilities for Productivity 
Enhancement (Article 24 of RSTA /Article 25 of TERCL)
    C. Tax Credit for Investment in Facilities for Special Purposes 
(Article 25 of RSTA)
    D. Reserve for Overseas Market Development (formerly, Article 17 of 
TERCL)
    E. Reserve for Export Loss (formerly, Article 16 of TERCL)
    F. Tax Exemption for Foreign Technicians (Article 18 of RSTA)
    G. Reduction of Tax Regarding the Movement of a Factory That Has 
Been Operated for More Than Five Years (Article 71 of RSTA)
    H. Tax Reductions or Exemption on Foreign Investments under Article 
9 of the Foreign Investment Promotion Act (``FIPA'')/ FIPA (Formerly 
Foreign Capital Inducement Law)
    I. Duty Drawback on Non-Physically Incorporated Items and Excessive 
Loss Rates
    J. Export Insurance
    K. Electricity Discounts Under the RLA Program
    L. Import Duty Reduction for Cutting Edge Products
    M. System IC 2010 Project
See Hynix's January 29, 2009, questionnaire response at 20 and the 
GOK's January 29, 2009, questionnaire response at 22.
    In the first administrative review, the Department found that ``any 
benefits provided to Hynix under the System IC 2010 Project are tied to 
non-subject merchandise'' and, therefore, that ``Hynix did not receive 
any countervailable benefits under this program during the POR,'' in 
accordance with 19 CFR 351.525(b)(5). See Dynamic Random Access Memory 
Semiconductors from the Republic of Korea: Final Results of 
Countervailing Duty Administrative Review, 71 FR 14174 (March 21, 
2006), and the accompanying Issues and Decision Memorandum at 15. No 
new information has been provided with respect to this program. See 
Hynx's April 14, 2009 supplemental questionnaire at 1. Therefore, we 
preliminarily find that Hynix did not receive any countervailable 
benefits from the System IC 2010 Project during the POR.

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we calculated an 
individual subsidy rate for Hynix, the producer/exporter covered by 
this administrative review. We preliminarily determine that the total 
estimated net countervailable subsidy rate for Hynix for calendar year 
2007 is 0.06 percent ad valorem, which is de minimis in accordance with 
19 CFR 351.106(c)(1). Consequently, if these preliminary results are 
adopted in the final results of this review, the Department will 
instruct U.S. Customs and Border Protection (``CBP'') to liquidate 
shipments of DRAMs by Hynix entered or withdrawn from warehouse, for 
consumption from January 1, 2007, through December 31, 2007, without 
regard to countervailing duties. See 19 CFR 351.106(c)(1). We intend to 
issue these instructions 15 days after publication of the final results 
of this review.
    On October 3, 2008, the Department published a Federal Register 
notice that, inter alia, revoked this order, effective August 11, 2008. 
See Dynamic Random Access Memory Semiconductors From the Republic of 
Korea: Final Results of Sunset Review and Revocation of Order, 73 FR 
57594 (October 3, 2008). As a result, CBP is no longer suspending 
liquidation for entries of subject merchandise occurring after the 
revocation. Therefore, there is no need to issue new cash deposit 
instructions in the final results of this administrative review.

Public Comment

    Interested parties may submit written arguments in case briefs 
within 30 days of the date of publication of this notice. Rebuttal 
briefs, limited to issues raised in case briefs, may be filed not later 
than five days after the date of filing the case briefs. Parties who 
submit briefs in this proceeding should provide a summary of the 
arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Copies of case briefs and rebuttal briefs 
must be served on interested parties in accordance with 19 CFR 
351.303(f).
    Interested parties may request a hearing within 30 days after the 
date of publication of this notice. Unless otherwise specified, the 
hearing, if requested, will be held two days after the scheduled date 
for submission of rebuttal briefs.
    The Department will publish a notice of the final results of this 
administrative review within 120 days from the publication of these 
preliminary results.
    We are issuing and publishing these results in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 28, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-18597 Filed 8-3-09; 8:45 am]
BILLING CODE 3510-DS-S